Will there be a student loan and university fees shake-up?

Post by Mearns & Company in News

A review of post-18 education in England has put student financing under the spotlight yet again – and could be the subject of another bout of reform.

Fees vary throughout the four constituent parts of the UK, with England having the highest overall. English students will pay up to £9,250 wherever they study in the UK, unless they go to Wales, in which case the maximum is £9,000. Scottish students studying in Scotland remain free of tuition fees, while those from Northern Ireland who stay home only pay £4,160.

The review, chaired by Dr Philip Augar, suggested several major reforms. While these focused on the system in England, they could well prompt a response from other parts of the UK as well.

The suggested reforms include:

  • The cap on university tuition fees should be reduced to £7,500 a year by 2021/22, frozen for 2022/23 and then should be inflation-linked from 2023/24.
  • For new students from 2021/22, the annual income threshold at which loans start to be repaid should be cut from £25,000 to £23,000 (in 2018/19 values). The loan repayment rate should remain at 9% of income above the threshold.
  • The maximum repayment term for new students should be extended from 30 to 40 years.
  • A cap should be put on lifetime repayments at 120% of the initial loan amount, adjusted for inflation.
  • Means-tested maintenance grants should be reintroduced and the eligibility thresholds revalued in line with inflation.

A surprising consequence of the proposals is that the total repaid by the highest-earning graduates would be less than under the current rules. But those on ‘middle of the range’ graduate earnings could end up paying a lot more as a result of the ten-year extension of the repayment term.

These proposals would change important aspects of student financing, but most graduates would still start their working lives with a substantial amount of inflation-linked debt. Some may even end their working lives 40 years’ later in a similar situation.

If you have children or grandchildren heading for university in the coming years, you may want to factor their education costs into your financial planning.


If you have any questions or would like advice please use our contact page here.

Newsletter Signup

We send out a quarterly newsletter. If you would like to receive a copy please sign up below.

  • This field is for validation purposes and should be left unchanged.

You are now leaving the website of Mearns & Company and we are not responsible for the content of this external website.